Top of the shop: how online bingo flourished with land-based venues closed

Anyone who religiously dials into the quarterly and full-year results presentations from leading multi-vertical operators will know it is rare for bingo to get a mention, and arguably rightly so when sports betting and casino dominate the revenue mix. Kindred Group, for instance, never breaks out bingo on its ‘Product Balance’ slide, even though poker gets its own category, accounting for just 2% of gross winnings revenue. That underlines bingo’s (un)importance to the business. Yet with coronavirus-enforced lockdowns ushering people indoors and bingo halls in the UK mothballed for months this year, online bingo has benefited as land-based players switch to digital options and new players give numbers games a spin. During GVC’s H1 2020 results presentation, the FTSE 100 gambling giant noted how its Foxy and Gala Bingo brands had “grown exceptionally well” after the UK’s lockdown kicked in from 23 March. And while GVC noted during its Q3 investor and analyst call that poker’s renaissance in Q2 had waned, bingo was still flying high. CFO Rob Wood said: “On the bingo side, that’s still really strong, and I spoke a little before about how a channel shift has been particularly prevalent in UK bingo. And that continues to be the case.” Meanwhile over at 888, management announced a 21% year-on-year rise in B2B revenue in H1 was partly attributed to its B2B bingo offering, Dragonfish. The London-listed company revealed B2C bingo increased 8% to $21.1m, while there was a 43% YoY rise in new customer acquisitions through bingo. For one of the UK’s leading bingo brands, Sun Bingo, which has given away £5bn since its inception in 2006 and recently underwent a mobile-focused makeover to optimise the site’s UX, lockdown helped drive players to the Playtech-powered product. “We saw an uptick in terms of some of our older customer base and people we haven’t seen for years coming back, so that was a plus for us,” reveals Simon Collins, MD for betting and gaming at News UK. “But the negative, as we all had, was there was no allowance for advertising, despite the fact I think bingo is a very safe pastime. We were all in the same boat and requested not to advertise… so we didn’t, as I’m sure nobody else did, execute any kind of campaign or activation to get in front of those people who were unfortunately unable to get to their [bingo] halls.” Besides Sun Bingo, Playtech’s platform is used by brands including Buzz Bingo, Mecca, Sky Bet, bet365, Paddy Power and William Hill. Angus Nisbet, director of digital bingo at Playtech and previously gaming director at Mecca, says operators noticeably ramped up user acquisition efforts in Q2 and Q3 on the bingo side. “Paddy Power, for example, will have spent a lot of focus this year trying to acquire bingo players, the core bingo demographic being 30- to 50-year-old females. Those guys will have seen an uplift because of the focus on bingo acquisition, but we definitely have seen sportsbooks using bingo as a tool for promotion while there were no sports. So, the William Hills of this world have used bingo as a vertical of interest during the pandemic.”

A state of flux

While online bingo has traditionally been considered a may-as-well-have product rather than a must-have product, the past few years certainly haven’t been dull in the bingo space as M&A swept through. In late 2017, GVC acquired bingo operator and supplier Cozy Games, subsequently shuttering almost 90 of its sites and migrating the lion’s share of GVC’s bingo brands onto the acquired platform. 888 snapped up the Mandalay portfolio of bingo brands, including Costa Bingo, from JPJ Group (now Gamesys) in early 2019 in a deal worth £18m, while multi-channel operator Rank Group swooped last year for Stride Gaming, stumping up £115.3m as a means of getting its hands on a proprietary tech platform to spearhead its digital growth. On top of this consolidation, Microgaming recently took the decision to close its bingo network. The supplier’s bingo platform was home to brands including 32Red, Betsson, Betway and Danske Spil, although many haven’t switched to other networks (GVC announced on 6 November that Danske Spil had joined its network). So, the wave of M&A and site closures, combined with shuttering of Microgaming’s network, has certainly reduced the pool of bingo brands. For its fifth annual report into the sector, WhichBingo described 2019 as a pivotal year with many of the sites that sprang up during the boom years “falling by the wayside”. The XLMedia-owned affiliate reported that there were 395 live sites in the UK at the end of 2018, however this number slumped the following year to 264 as 131 disappeared. “The market availability of bingo sites has shrunk considerably in the last 18 months,” Gadi Shoshani, WhichBingo’s VP for casino in Europe, reiterates to EGR. So, had the UK market become oversaturated? “One hundred percent – it was getting really bad,” insists Savvas Fellas, founder of in-house-built challenger casino and bingo operator MrQ. “But Rank closed a lot of the Stride sites down and GVC closed a lot of the ones [Cozy sites] that came with that deal because they were just doorway pages and there wasn’t really anything going on. “Microgaming dialled things up in that they had big brands, but it was too clunky and expensive to maintain, obviously. It’s strange to see that some of those guys haven’t taken another solution; Betsson and 32Red closed without a solution. But there was way too much noise [before] and I’m personally glad that it has died down because it separates the men from the boys,” he added. Despite this trend, a couple of casino operators have added bingo in the UK of late. In August, PlayOJO debuted a product powered by Pragmatic Play featuring 90-ball, 80-ball and 75-ball variants, as well as an industry-first Bingo Blast game. Six weeks later, LeoVegas rolled out bingo on desktop and mobile to expand its portfolio.

With regulatory compliance that’s coming in, and has come in already, bingo is kind of one of the better options in terms of a socially responsible proposition. It’s low stakes and has a slightly different perception with the regulatory authorities – it’s more of a pastime and is often considered to be on a par with Lotto and alike – Simon Collins, News UK

“The global bingo market is worth approximately €2bn, with only 23% currently being played online,” says Mattias Wedar, chief product and technical officer at LeoVegas, citing a H2 Gaming Capital statistic. PlayOJO’s co-founder Ohad Narkis told EGR recently that to launch bingo was a logical step when around a quarter of its users played online bingo elsewhere. The move means PlayOJO and LeoVegas can now advertise bingo and their brands on daytime TV too. For Collins, who co-founded Cashcade (Foxy Bingo), a bingo business sold to PartyGaming for £96m in 2009, before he co-founded Gaming Realms, brand is key when trying to crack a mature market like the UK. “My assessment when I took on the role with News UK was you need a mega-brand, such as The Sun, to compete. Without that, you’re going to struggle.” Those brands that congregate at the top of the UK market include the likes of multi-channel bingo operators Mecca (Rank) and Buzz Bingo (previously Gala), Gamesys’ JackpotJoy and Heart Bingo, GVC’s Foxy Bingo and, of course, tombola. The privately-owned firm and its proprietary software have become a formidable force in the UK, Spain and Italy over the years and drawn plaudits for efforts around community and responsible gambling. Indeed, responsible gambling and low-stakes play has long been front and centre in its messaging. “Slow and steady wins the race,” suggests Fellas when discussing tombola’s rise to the top since the Sunderland-based outfit’s creation in 1999. “Everyone else was being greedy and using bingo as a loss-leader, and not focusing on bingo. They [tombola] focused on their core offering, they didn’t really pay attention to anyone else, and they added the Arcade element that carried their ethos with it with the £1 max stake. They’ve stuck to a strategy that works.”

Financial strains

As we’ve discussed, the national lockdown earlier this year led to increased traffic for bingo sites and apps, yet the second national lockdown in November may not trigger quite the same uptick. As well as a deep recession and massive job losses to contend with in the UK, many people’s discretionary spend will take a hit now and over the winter. With the UK government extending the Coronavirus Job Retention Scheme to March 2021, subsidising workers’ wages in businesses forced to close their doors, research from McKinsey & Company suggests that women’s jobs globally are 1.8 times more vulnerable to the pandemic than men’s jobs. Bingo players tend to be female (across all of Gamesys’ products women make up 60% of players) and could very well fall into socioeconomic groups impacted most by the economic downturn. With that in mind, should the online bingo sector be concerned about its core demographic of players reducing their play? Nisbet responds: “Bingo is fairly recession-proof because a bingo player doesn’t tend to have much money at any time, without being patronising, because of the demographic of bingo – they live within their means and bingo is part of their life as a leisure activity. “You have to remember bingo is not a product where you can spend a lot of money very quickly; a game lasts six minutes and the average spend per round is about a pound. So, spending £10 playing bingo will take you a long time. I wouldn’t say it is recession-proof, but I’d say it is recession-resistant.” On this topic, Collins says: “You would be crazy if you’re in any business to say that you’re not currently worried about the potential economic impact as people come off the subsidised schemes. But I think it’s a resilient business model insomuch as it’s a low-stakes, volume-based proposition. If there is a downturn across the rest of the economy, I still think people will look to have entertaining aspects in their lifestyle, and often that will be staying at home and maybe spending a couple of pounds on a few bingo tickets and chatting with mates. I think it has resilience but obviously we are all concerned.” Data published by the Gambling Commission last February showed that of those who played bingo in the previous four weeks to being surveyed, 81% did so in person. It’s why there were efforts before coronavirus on the land-based side to sex-up bingo and distance itself from the stereotype of a pastime enjoyed by your granny. For instance, new-entrant Dabbers Social Bingo in London is a contemporary, neon-lit bingo experience with games played against a backdrop of loud music and singers, with patrons encouraged to get up and dance in between sips of their cocktails. Likewise, Bongo’s Bingo, which describes itself as a crazy mix of traditional bingo, dance-offs, rave intervals and audience participation, looks more like a hedonistic all-nighter at an Ibiza club than a hushed evening spent hunched over bingo cards. “If you go to one of those nights you feel the energy and the dynamism, so maybe you could convert that to an online setting,” Collins muses. “We’re all familiar with Zoom, so why not pass the time on Zoom with a shandy while playing bingo?” During lockdown, Playtech introduced live video streams to digital games, with hosts commentating on bingo games, and now there is the emergence of live bingo aiming to replicate the same realism found in live casino with streams of bingo draws from plush studios and with presenters. For example, Playtech has just launched its Deal or No Deal – The Big Draw based on the hit TV show with gameshow-like presenters calling numbers and relaying offers from the mysterious ‘banker’. “In time, that could lead to proper live bingo where you could be playing the same game being called in a bingo club,” says Nisbet as he hints at future developments. However, you may well question why it’s taken until 2020 for live to reach this vertical when live casino has existed for the best part of 15 years. “I think the bingo industry has just been a bit overlooked,” suggests WhichBingo’s Shoshani. “What’s happening right now is that sort of awakening where people realise nothing has happened here for a long time, so let’s bring those innovations into the bingo industry. This coming year is going to be very interesting.” Part of the reason why the vertical has been “overlooked” is because it is a low-stakes product and can be expensive to run. It’s peer-to-peer and so it needs liquidity and chat moderators building the community atmosphere. Bingo has instead been used by many operators as merely a vehicle for user acquisition and to then cross-sell players into soft-slots games on the side or full-blown slots titles and table games. It lagged behind sports and casino too in the transition to mobile 10 years ago. The constraints of smartphone screens meant including the important chat functionality was a challenge. Thus, players were slower to migrate to mobile. According to WhichBingo’s Online Bingo Player Survey, 36.5% of those quizzed played solely on smartphones in 2019, up from 27% in 2018. Just 6% were desktop-only players. Yet even with today’s generation of palm-stretching devices, mobile bingo has limitations. “Mobile was a lot harder for bingo and there have been a lot of efforts to address that,” says Collins. “For a bingo experience, you really need a tablet-sized screen, but it has taken time for people to get hold of a tablet. Tablets [account for] a tiny percentage of people playing, so you’ve still got the restrictions of the mobile screen real estate.” That said, bingo has a place today in any diversified operator’s product mix. It is also insulated to a large degree from potential stake caps and the banning of VIP programmes. It is also distinctly possible pre-watershed bingo TV advertising and sponsorship of popular shows will be allowed to remain following the UK government’s upcoming review of the 2005 Gambling Act. “With regulatory compliance that’s coming in, and has come in already, bingo is kind of one of the better options in terms of a socially responsible proposition,” explains Collins. “It’s low stakes and has a slightly different perception with the regulatory authorities – it’s more of a pastime and is often considered to be on a par with Lotto and alike.” Nisbet echoes these sentiments: “With all the regulation changes that are coming with affordability and with people spending more time at home, I think bingo has got a great future. I think it is as healthy now as it has been in a number of years.” In fact, he insists coronavirus has accelerated trends that were already happening, primarily the omni-channel push to bridge the gap between online and clubs. “The technology shifts that had to happen over the last year to allow us to deliver stuff that we’re delivering for Mecca and Buzz Bingo have been dramatic. All those businesses are fairly bullish about what the future holds.” So, it could very well be the case that online bingo starts to grab some more of the limelight during those quarterly and full-year results presentations from the multi-vertical online operators.